IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:	CIBC Trust Corporation v. Bayly and Bayly,
	2005 BCSC 133

Date: 20050202
Docket: 04 0137
Registry: Victoria

Between:

CIBC Trust Corporation

Plaintiff

And:

Conran Bayly and Joyce Bayly

Defendants

Before: The Honourable Mr. Justice R. D. Wilson

Reasons for Judgment

Counsel for the Plaintiff:	E. St.J. Pollard
Counsel for the Defendants:	J.C.M. Main
Date and Place of Trial/Hearing:	January 21, 2005
	Victoria, B.C.

I.

[1]                 The plaintiff says the defendants received payment of money by mistake.  It asked the defendants to return the money.  They did not.  Hence, this lawsuit.

II.

[2]                 This history precipitating this litigation is not in dispute.  Accordingly, I find the following facts.

[3]                 On 29 May 1998, the plaintiff provided instructions to solicitors, to prepare the last will and testament of the late Gordon Edwin Goddard.

[4]                 On 15 June 1998, Mr. Goddard attended upon the solicitors to sign the will prepared on the plaintiff's instructions.

[5]                 By that will, Mr. Goddard appointed the plaintiff, and his brother, Peter Lewis Goddard, to be the co-executors and co-trustees of his will.  Among other things, Mr. Goddard instructed his trustees:

(e)        To pay the following cash legacies to the following persons:

(ii)         Twenty Thousand Dollars ($20,000) to my friends, CON and JOYCE BAYLY, presently of 1111 McBriar Avenue, Victoria, B.C., V8X 3M4, or all to the one then alive.  If they both predecease me, then this legacy shall lapse;

[6]                 Mr. Goddard died on 8 April 2000.

[7]                 On 19 April 2000, it was agreed between the plaintiff and Mr. Peter Goddard, that the plaintiff would, "handle the bulk of the estate administration".

[8]                 On 26 June 2000, letters probate to the will were granted to the plaintiff and Mr. Peter Goddard.

[9]                 On 28 March 2001, the plaintiff forwarded to each of the defendants a cheque in the sum of $20,000 and a release.

[10]             Ms. Bayly cashed the cheque she received from the plaintiff on 5 April 2001.  Mr. Bayly cashed the cheque he received from the plaintiff on 6 April 2001.

[11]             On 2 May 2001, Mr. Peter Goddard asked the plaintiff why each of the Baylys had been sent a cheque for $20,000 when the will provided for a single legacy of $20,000 to the Baylys.

[12]             By a letter dated 9 May 2001, the plaintiff wrote to the defendants advising that an error had been made in sending two cheques, when the will called for one legacy only.  The plaintiff asked of the defendants that they remit a cheque in the amount of $20,000, payable to the estate and forward it to the plaintiff.

[13]             As a result of the defendants' failure to respond to the plaintiff's inquiries of 9 May 2001, a representative of the plaintiff, Mr. Stewart, telephoned to and spoke with Mr. Bayly on 12 June 2001.  Mr. Bayly acknowledged that he had to pay the monies back; but said his then current financial situation was poor.

[14]             There was a further telephone conversation over this topic, between Mr. Stewart and Mr. Bayly on 25 June 2001.

[15]             On 11 July 2001, Mr. Stewart wrote to the defendants confirming the plaintiff's requirement that the defendants repay the $20,000.  As well, Mr. Stewart made inquiries to the end that a repayment schedule could be established.

[16]             On 11 July 2001, the plaintiff paid to the estate the sum of $20,000, in recognition of its error.

[17]             On 6 December 2001, there was a further telephone conversation between Mr. Stewart and Mr. Bayly.  That conversation was followed by a letter dated 3 January 2002 from Mr. Stewart to Mr. Bayly.  In that letter, Mr. Stewart enclosed a return envelope for Mr. Bayly to forward the $20,000 which the plaintiff was demanding.  That was followed by a further telephone conversation between Mr. Stewart and Mr. Bayly on 13 January 2002, again concerning repayment.

[18]             The next event in this history did not occur until 16 June 2003.  By a letter of that date, Mr. Stewart wrote to the defendants, as follows:

It has been some considerable time since we last communicated and we are still waiting for the return of the $20,000.00 legacy overpayment made from the above estate.  Would you please call me on receipt of this letter to discuss some alternatives to a formal legal action.

[19]             Absent alternatives, this formal legal action was taken.

[20]             The plaintiff now applies for a summary disposition of the action, pursuant to R. 18A of the Rules of Court.

III.

[21]             In response to the plaintiff's application, the defendants raise three issues:

(a)        the proper and ordinary meaning of the words in the clause in question, is that each of the defendants received the sum of $20,000.  The words in that provision are consistent with an intention that $20,000 each be given to each of the defendants;

(b)        the plaintiff has no standing to prosecute this action; and

(c)        there has been a material change of the defendants' position as a result of the plaintiff's mistake.

[22]             Additionally, as is the case in any summary trial application, there is the issue, which is the preliminary issue, of whether or not this application is suitable for a summary disposition.

[23]             Counsel agree that this is an appropriate case for summary disposition.

[24]             It does not appear that the material facts are in dispute.  Counsel appear to agree on the legal principles applicable to the resolution of the dispute.

[25]             The inquiry into the suitability of a summary disposition has two components:

So judgment should not be given under subrule 18A(3) without asking these two questions:  Has any party been denied an opportunity to produce relevant testimony?  Is there a conflict in the evidence, which the judge can not readily resolve, on a point of fact which could affect the result?  If the answer is "Yes" to either question then the case is probably not ready for judgment.[1]

[26]             On this application, the answer to both questions is "No".  No party has been denied an opportunity to produce relevant testimony.  There is not a conflict in the evidence which cannot readily be resolved, on a point of fact which could affect the result.

[27]             Accordingly, I agree with counsel that this matter is suitable for disposition by summary trial under R. 18A.

IV.

[28]             The defendants' argument that the plain and ordinary meaning of the words in the clause in question means that each of the defendants was to receive a legacy is not persuasive.

[29]             The testator was alert to the difference between the plural and the singular.  In the introduction to the section dealing with the payment of legacies, the testator said "To pay the following cash legacies to the following persons:".  There then follow five subparagraphs gifting the sum of $20,000 to the persons named in those subparagraphs.  The defendants were to receive $20,000, "or all to the one then alive".  "If they both predecease me, then this legacy shall lapse".  Again, legacy is in the singular.

[30]             There is nothing ambiguous or vague about the words used by the testator.  Clearly, it was a gift of one legacy of $20,000 to two people.

V.

[31]             In their statement of defence, the defendants plead, among other things:

4..        In the alternative, and in answer to the whole of the said Statement of Claim, if the Plaintiff, by mistake, in its capacity as Co-Executor and Co-Trustee of the Estate of the said Gordon Edwin Goddard paid the Defendants a sum of money otherwise than in accordance with the said will of Gordon Edwin Goddard, then the Defendants say that the Plaintiff is not entitled to claim return of the said money in its own capacity.

5.         In further answer to the whole of the Statement of Claim, the Plaintiff is not entitled to claim return of the said money without joining the Co-Executor of the Estate of Gordon Edwin Goddard and without the authority of the Co-Executor to make such a claim.

[32]             The defendants argue that if there is a cause of action, that cause of action lies with the estate of the late Mr. Goddard, or, alternatively, with the co-executors.  And, it is said, co-executors of an estate must act in concert.[2]

[33]             By the time this action was commenced, however, the estate had been reimbursed for the error made by the plaintiff.  The estate has, at the present time, not suffered a loss.

[34]             In its statement of claim, the plaintiff made the following allegations:

6.         On or about the 29th day of March, 2001, the Plaintiff, by mistake, and in its capacity as Co-Executor and Co-Trustee paid to the Defendant the sum of $40,000.00.

7.         Upon realizing the mistake the Plaintiff, on or about the 21st day of August, 2003, paid the sum of $20,000.00 to the Estate of Gordon Edwin Goddard.

8.         The Plaintiff has made a demand to the Defendants for the return of the money but the Defendants have refused to return the said monies and have wrongly retained the said monies.

[35]             The correspondence the defendants received from the plaintiff should have made it clear that it was the plaintiff seeking return of the money, not the estate.  The defendants knew or ought to have known that the claim was the claim of the plaintiff.

[36]             The defendants appear to acknowledge that upon the receipt of the funds from the plaintiff, the estate could have assigned its cause of action against the defendants to the plaintiff.  If that assignment had occurred, then, the defendants appear to acknowledge, the plaintiff would have standing to maintain this action.

[37]             The logical inference to draw from the circumstances is that the plaintiff did take an assignment of the cause of action from the estate.

[38]             In an affidavit sworn 14 July 2004, the co-executor, Mr. Peter Lewis Goddard, deposed, among other things, as follows:

8.         I am aware that CIBC Trust Corporation has, in its own capacity, commenced an action against Conrad [sic] Bayly and Joyce Bayly for the return of the aforesaid $20,000.00 and although I was not aware that the action had been commenced I do not oppose the action being brought by CIBC Trust Corporation against the Defendants, Conrad [sic] Bayly and Joyce Bayly as I believe it is a matter to be resolved between the Plaintiff and the Defendants.

[39]             Mr. Goddard, as co-executor and co-trustee, has ratified the actions of the plaintiff.

[40]             Dismissal of this action, in the absence of an "absolute assignment in writing", would not achieve the object of the Rules of Court, which, as prescribed in R. 1(5), "is to secure the just, speedy and inexpensive determination of every proceeding on its merits".  Nor would it comply with the provisions of s. 10 of the Law and Equity Act:[3]

10.        In the exercise of its jurisdiction in a cause or matter before it, the court must grant, either absolutely or on reasonable conditions that to it seem just, all remedies that any of the parties may appear to be entitled to in respect of any legal or equitable claim properly brought forward by them in the cause or matter so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of legal proceedings concerning any of those matters may be avoided.

[41]             There is no prejudice to the defendants in finding that an assignment was taken.  If the defendants were puzzled by the demands of the plaintiff, they had a remedy in s. 36(2) of the Law and Equity Act:[4]

36(2)     If the debtor, trustee or other person liable in respect of the debt or chose in action has had notice that the assignment is disputed by the assignor or anyone claiming under the assignor, or of any other opposing or conflicting claims to the debt or chose in action, the debtor, trustee or other person

(a)        is entitled to call on the persons making the claim to interplead concerning the debt or chose in action, or

(b)        may pay the debt or chose in action into court, under and in conformity with the Trustee Act.

[42]             The defence of the plaintiff's standing fails.

VI.

[43]             Finally, the defendants say there has been a material change of their position on the basis of the plaintiff's mistake.

[44]             The defendants say that they believe they were entitled to $20,000 each.  This, they say, was how they interpreted the will.  And, that interpretation was influenced by discussions said to have been held between themselves and the late Mr. Goddard prior to his death.  The defendants were wrong.

[45]             After the receipt of the two cheques, at a date not stated, although, presumably, evidence of the date was readily available, $22,000 was expended to be applied to the defendants' Toronto Dominion Bank line of credit; and $8,207.32 was applied to their Canadian Imperial Bank of Commerce line of credit.

[46]             The defendants' son was involved in a "very serious motor vehicle accident" on 1 March 2002.  The defendants have been assisting their son, financially, since the date of that loss.  They have given to him, or paid to his creditors, more than $50,000.  They have had to borrow all of that money, and say they are suffering financially as a result of the interest costs on that money.

[47]             In November and December 2001, over six months after the plaintiff had advised them of its error, the defendants made two further payments on their son's CIBC Visa accounts, then in arrears, in a total amount of approximately $6,000.

[48]             Finally, the defendants say that the plaintiff's letter of 16 June 2003 was the first communication they had from the plaintiff following the telephone conversations and the correspondence of January 2002.  In result, say the defendants, they believed that the plaintiff would not proceed with any claim against them for return of any of the money paid out of the estate.  They say that they relied on that belief for Ms. Bayly to make the decision to retire from her employment.  That decision was taken in early 2003, well in advance of the 16 June 2003 communication from the plaintiff.  The decision was irrevocable.  Ms. Bayly did retire in September 2003.

[49]             Debt alone does not constitute a material change in position.[5]

[50]             In my opinion, Ms. Bayly's decision to retire on the belief that the plaintiff would not pursue its claim is unreasonable.  The taking of such a momentous decision, when they knew that the plaintiff had made a demand, and without any inquiry of the plaintiff of whether or not it continued to pursue that claim, was improvident.

[51]             I am not persuaded that the defendants have established a defence of material change in position.

VII.

[52]             If a person pays money to another under a mistake of fact which causes him to make the payment, he is prima facie entitled to recover it as money paid under a mistake of fact.[6]

[53]             The plaintiff has established the necessary and sufficient conditions for an order that it do recover its mistaken payment,[7] namely:

(a)        the mistake was an honest mistake;

(b)        the mistake was between the estate, in whose stead the plaintiff now stands, and the defendants.  In other words, the defendants were party to the mistake in that, they were connected to it, by receiving and retaining the money;

(c)        the facts, as they were believed by the plaintiff's representatives at the time the mistaken payment was made, imposed an obligation to make the payment under the will; and

(d)        the defendants have no legal, equitable or moral right to retain the money; it cannot be retained honestly and conscionably.

[54]             Accordingly, an order will go in the terms of the plaintiff's notice of motion filed 10 September 2004.  Interest, pursuant to the Court Order Interest Act, calculated at Registrar's rates, shall accrue from the 1st day of June 2001 to date of judgment.  Costs will be ordinary costs assessed on Scale 3.

“R.D. Wilson, J.”
The Honourable Mr. Justice R.D. Wilson